The Cost of External Equity Is Greater Than the Cost

question 53

Multiple Choice

The cost of external equity is greater than the cost of internal equity because ____.

• A) it decreases the earnings per share
• B) it increases the market price of the stock
• C) of the flotation costs
• D) dividends are increased

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Definitions:

State Power

The authority granted to states to govern within their territories, recognizing their rights and responsibilities.

McCulloch V. Maryland

A landmark Supreme Court case in 1819 that established the principle of federal supremacy over state laws and laid the groundwork for the expansive interpretation of the federal government's implied powers.

Gibbons V. Ogden

A landmark Supreme Court case in 1824 that clarified the scope of Congress’s power under the Commerce Clause, ruling that federal law overrules state law in matters of interstate commerce.

State Governments

State governments are the governing bodies of individual states within a federation, responsible for executing state laws and managing state-specific affairs.